The United States of America (USA), commonly referred to as the United States (US), America or simply the States, is a federal republic consisting of 50 states and a federal district. The 48 contiguous states and the federal district of Washington, D.C., are in central North America between Canada and Mexico. The state of Alaska is the northwestern part of North America and the state of Hawaii is an archipelago in the mid-Pacific.

Energy Maps featuring United States

Extend network

Today, the U.S. electric grid is a network of approximately 10,000 power plants, 170,000 miles of high-voltage (>230 kV) transmission lines, over six million miles of lower-voltage distribution lines, and more than 15,000 substations.

Energy procedure

Under the Reinvestment and Recovery Act 2009, the Department of Energy, through the Office of Electricity Delivery and Energy Reliability, is working to strengthen capabilities for long-term analysis and planning in the three interconnected electricity grids of the “lower 48” United States, namely the Western, Eastern and Texas interconnections. Diversified steering committees, including at least 1/3 representation from state-level actors, are developing future electricity supply scenarios and analysis of environmental and other considerations, for integration into future transmission network development plans.Overall energy planning is conducted at a state and regional level, with each state ensuring adherence to federal policy and procedure in energy planning. The majority of current state energy plans encompass policy initiatives such as renewable portfolio standards and energy efficiency requirements, as well as “green power” purchase levels for individual states, and greenhouse gas reduction goals. Other quasi-governmental bodies, such as regional Governor’s Associations, are also involved in energy planning, and as such bodies such as the New England Governor’s Conference and the Northwest Power and Conservation Council co-ordinate energy planning at a federal level, within geographic regions of the United States.

Energy debates

The re-election of Obama brought a huge relief for the country’s clean energy sector. Nationwide polls have increasingly suggested that Americans are in favour of a reduced dependence on oil and the development of a sector with the potential to generate new jobs. In the face of the most widespread drought since 1956, there have been calls to increase focus on clean energy sources such as wind and solar that require less water than conventional power. The devastation caused by Hurricane Sandy is also likely to bring the issue of climate change to the forefront of public opinion,

Energy sources

Coal for many years supplied half the electricity generated nationally. In recent years its share has declined; it was about 42% in 2011, and about 39% through August 2013. Generation by natural gas has risen in importance, supplying about 26% through August 2013. Nuclear fission supplies about 20%, hydropower less than 10%. Petroleum, an important generating fuel in the 1970s and early 1980s, now contributes less than 1% of electricity generation. A surge of construction of wind-powered generating capacity has brought its share of total generation to almost 5%.Renewable generation provides a small percentage of total US capacity in generation. Wind and solar capacity have grown faster than other renewable resources in the US in recent years, and capacity factors have risen with technological innovation and improved manufacturing processes. The US wind industry has added over 35% of all new generating capacity over the past five years, second only to natural gas, and more than nuclear and coal combined. Wind energy became the number one source of new US electricity generating capacity for the first time in 2012, providing some 42% of all new generating capacity.

Regulatory roles

FERC’s mandate is to ‘ensure supplies of energy at just, reasonable and not unduly discriminatory or preferential rates’. In regulating wholesale electric power markets, FERC has implemented a policy of fostering competition. This has meant granting open access to transmission lines and thereby allowing wholesale customers to meet their needs with purchases from any number of wholesale suppliers connected across a regional grid.

Competition

There are thousands of retail electricity providers in the US and they operate under a variety of regulations. Most retail customers are served by regulated, investor-owned utilities (69%), but public power systems (14%) and cooperatives (12%) also serve millions of customers. In the 1990s, many states began to explore options for restructuring retail electricity markets to create competition among electricity providers while continuing to regulate distribution networks as natural monopolies. Fifteen states now allow some customers a choice of electric service provider, but efforts to deregulate retail electricity markets slowed when, in 2000 and 2001, California’s newly deregulated retail market proved vulnerable to abuse, leading some customers’ bills to quickly triple and forcing some distribution utilities into bankruptcy.Investor-owned utilities must functionally unbundle (but not divest) wholesale generation and power marketing from transmission services (FERC Order No. 888). In practice, this means that power schedulers and power marketers within vertically integrated utilities are operationally, if not physically, isolated from their company's counterparts who handle transmission operations.

Energy efficiency

As of 2011, 39.1%, or 589,374 ktoe of final energy consumption was attributable to the transport sector in the United States. Significant potentials for energy savings were also identified in the industrial, commercial and residential sectors from 2009 onwards. By 2020, an estimated 23% of end-use consumption, and 26% of primary energy consumption, was seen to be economically feasible compared to a business-as-usual scenario. This encompasses 18%, 29% and 28% reductions in end-use consumption in the industrial, commercial and residential sectors respectively, saving an estimated US$130 billion in energy costs in the period.

Capacity concerns

Most of the electricity grid currently in place was built by and for the regulated monopoly utility industry and is not fully prepared to handle the increasingly larger and faster changes in markets and technologies on both the supply and consumer-side.

Government agencies

United States Department of Energy (DOE)The United States Department of Energy (DOE) is a Cabinet-level department of the United States government concerned with the United States' policies regarding energy and safety in handling nuclear material. Its responsibilities include the nation's nuclear weapons program, nuclear reactor production for the United States Navy, energy conservation, energy-related research, radioactive waste disposal, and domestic energy production. The Department is under the control and supervision of a United States Secretary of Energy, a political appointee of the President of the United States.Office of Energy Efficiency and Renewable Energy (EERE)Within the DOE, the Office of Energy Efficiency and Renewable Energy (EERE) accelerates development and facilitates deployment of energy efficiency and renewable energy technologies and market-based solutions that strengthen U.S. energy security, environmental quality, and economic vitality.United States Environmental Protection Agency (EPA)The United States Environmental Protection Agency (EPA or sometimes USEPA) is an agency of the U.S. federal government which was created for the purpose of protecting human health and the environment by writing and enforcing regulations based on laws passed by Congress. The agency conducts environmental assessment, research, and education. It has the responsibility of maintaining and enforcing national standards under a variety of environmental laws, in consultation with state, tribal, and local governments. The agency also works with industries and all levels of government in a wide variety of voluntary pollution prevention programs and energy conservation efforts.

Ownership

ElectricityAbout 80% of the electricity in the US is generated by private utilities, either traditional investor-owned utilities or IPPs. The remaining electricity is produced by federal agencies such as the Tennessee Valley Authority, the Bonneville Power Administration and the Power Marketing Administrations of the US DOE, as well as by municipal utilities and utility co-operatives. Some of the largest investor-owned utilities in the US include Exelon Corp, Energy Future Holdings Corp, FirstEnergy Corp, Public Service Enterprise Group Inc and the Southern Company. Among the largest IPPs are NRG Energy Inc, Calpine Corp, NextEra Energy Inc, Dynegy Inc, Tenaska Inc, and GDF SUEZ International Power.Competitive wholesale electricity markets function using distinct models in different regions. Regional transmission organizations and independent system operators administer transmission networks and operate wholesale markets across a large part of the US and Canada. In other regions, bilateral contracting between consumer and supplier with separate contracting for transmission remains the norm.GasNatural gas markets are similar to electricity markets, with competitive wholesale markets supplying federally regulated transmission pipelines, delivering into state regulated distribution networks. The Federal Energy Regulatory Commission once set natural gas prices, but wellhead prices were fully deregulated in 1993.

Degree of independence

FERC is an independent regulatory agency within the United States Department of Energy. Neither the President nor Congress reviews FERC decisions. All FERC decisions are reviewable by the federal courts. FERC is also self-funding. The Commission pays for itself by recovering costs directly from the industries it regulates through annual charges and fees.FERC is independent of the Department of Energy, but DOE may intervene just like any other party in FERC proceedings. FERC activities "shall not be subject to further view by the Secretary [of Energy] or any officer or employee of the Department".

Energy debates

Ten states in the north-eastern US are members of the Regional Greenhouse Gas Initiative (RGGI). This initiative has a narrower scope than the California plan, focusing on reducing carbon dioxide emissions from the power sector by 10% by 2018. The first permit auction for the cap-and-trade system was conducted in September 2008, and the first three-year compliance period began in January 2009. Six New England states are also members of the New England Governors/Eastern Canadian Premiers Climate Change Action Plan, whose 11members have resolved to reduce the region’s GHG emissions to 10% below 1990 levels by 2020.The Midwestern Greenhouse Gas Reduction Accord, signed in November 2007, with members including six US states and one Canadian province, aims to establish GHG reduction targets and the regulatory or market mechanisms that might be used to achieve them.A host of other regional initiatives focused on climate change or clean energy have now also been formed across the US with Mexican states and Canadian provinces, including the Western Governors Association Clean and Diversified Energy Initiative, the Southwest Climate Change Initiative, the West Coast Governors’ Global Warming Initiative, and the Western Climate Initiative (six states and two Canadian provinces, aiming for 15% below 2005 levels by 2020). These regional initiatives represent attempts to actively collaborate on goal setting and the development of action plans. Except for the RGGI in the north-east, all the initiatives are still in the design phase.

Energy framework

The National Energy Act of 1978 included legislation to promote energy conservation, to shift towards alternative energy sources, to create a market for independent power producers, and to give the FERC greater authority over natural gas markets. The Energy Policy Act of 1992 further opened electricity markets to competition; encouraged integrated resource planning by utilities; targeted improved energy management in federal agencies; promoted alternative transportation fuels; and required RD&D of technologies to enhance the production and efficient utilisation of renewable, fossil and nuclear energy resources.In 2005, a new comprehensive Energy Policy Act (EPAct 2005) was introduced as the successor to the 1992 Act. This was followed shortly after by the Energy Independence and Security Act of 2007 (EISA 2007). Together, these recent legislative packages substantially define the current US federal energy policy. The American Recovery and Reinvestment Act of 2009 (Recovery Act) is also noteworthy for having dramatically funding for many federal energy programmes.Biofuels represent another avenue for improving US energy security and have received strong policy support. Development of vehicles powered by alternative fuels and biofuel production were promoted by the 2005 EPAct, but EISA 2007 brought biofuels to the forefront of US energy security policy. EISA mandated a fivefold increase from previous biofuel use targets by 2022, requiring fuel producers to use a minimum of 136 billion litres (36 billion gallons), up from 34 billion litres (9 billion gallons) in 2008. To meet environmental objectives, from 2016, new biofuel production towards the mandated target is to be derived from cellulosic or other advanced biofuels that reduce lifecycle greenhouse gas emissions by at least 50%. Most of the new biofuel is to be produced domestically, and the target includes provisions to reduce the required volumes if costs are judged too high or supplies are inadequate. The Recovery Act sought to advance the commercialisation of electric vehicles by investing in facilities that manufacture batteries and other electric vehicle components. The government invested more than USD 2 billion in nearly 50 different electric vehicle and component manufacturing projects. Electric vehicles offer energy security benefits by shifting transportation energy demand from oil to electricity.Climate Action PlanIn June 2013, the United States announced its Climate Action Plan for steady, responsible national and international action to cut GHG emissions, based on three pillars: (i) cut carbon pollution in the United States; (ii) prepare the United States for the impacts of climate change; and (iii) lead international efforts to combat global climate change and prepare for its impacts. Each pillar in the plan consists of a wide variety of executive actions the president can take. The key mitigation elements are numerous:to cut CO2 pollution from coal-fired power plants by directing the US Environmental Protection Agency to establish carbon pollution standards for both new and existing power plants;to unlock long-term investment in clean energy innovation by making up to USD 8 billion in loan guarantee authority available for a wide array of advanced energy projects that use fossil fuels;to accelerate clean energy permitting by: directing the US Department of the Interior to permit 10 GW of renewables on public lands by 2020; setting a goal to install 100 megawatts of renewables in federally assisted housing by 2020; and deploying 3 GW of renewables in military installations;to expand the federal government’s Better Building Challenge to focus on helping commercial, industrial, and multi-family buildings become at least 20% more energy efficient by 2020;to reduce CO2 pollution by at least 3 billion metric tonnes cumulatively by 2030 through efficiency standards for appliances and federal buildings;to increase fuel economy standards by developing post-2018 fuel economy standards for heavy-duty vehicles;to leverage new opportunities to reduce pollution of hydrofluorocarbons (HFCs), direct agencies to develop a comprehensive methane strategy and commit to protect forests and critical landscapes.Energy Star (trademarked ENERGY STAR) is an international standard for energy efficient consumer products originated in the United States of America. It was created in 1992 by the Environmental Protection Agency and the Department of Energy. Since then, Australia, Canada, Japan, New Zealand, Taiwan and the European Union have adopted the program. Devices carrying the Energy Star service mark, such as computer products and peripherals, kitchen appliances, buildings and other products, generally use 20–30% less energy than required by federal standards. In the United States, the Energy Star label is also shown on EnergyGuide appliance label of qualifying products.On the Renewable Portfolio Standard and investement tax credit, please see the below section on regulatory framework

Reliance

In 2010, oil provided 873 Mtoe of the primary energy supply. This was a decline to pre-2000 levels with import dependence reducing substantially. In 1990, 42% of crude oil and products demand was met by net imports; the net import share peaked at 60% in 2005 and in 2011 net imports declined to 46%. The decline in imports is the result of several factors, including a decline in consumption resulting from the economic crisis, improving efficiency, and changing consumer behaviour. In addition, domestic oil production has increased significantly in recent years. Canada is the single largest supplier in 2011 with a 24% share of imports.The US trades in electric energy with Canada and Mexico. In 2011, the US imported 52.3 billion kWh of electricity, with net imports of 37.3 billion kWh. These cross-border sales are facilitated by the fact that the North American alternating current power grids reach both Canada through the Eastern and Western Interconnections, and Mexico through the Western Interconnection.

Role of the government

Within the US Government, jurisdiction over the production, transformation, transmission and consumption of energy is shared by several agencies in the executive branch. Supervision of the use of natural resources falls under the Department of the Interior. Energy-related research, development and deployment (RD&D) are under the auspices of the Department of Energy. The Federal Energy Regulatory Commission (FERC) oversees the interstate transmission of energy, and the Environmental Protection Agency (EPA) regulates the environmental impacts of energy transformations throughout the economy. The Department of Transportation (DOT) also plays an important role as the regulator of vehicle fuel economy. A new White House Office of Energy and Climate Change Policy was created in 2009 to coordinate some of the activities of these agencies. While all of these federal agencies have some voice in energy policy, the US Congress is responsible for creating the laws that govern the activities of these agencies and set the rules for energy markets.

Regulatory framework

The federal government, acting primarily through the federal tax code, and most state and local governments throughout the US have adopted legislation to support and incentivise the use of renewable energy.One of the federal government's primary policies in support of renewable energy is the federal electricity production tax credit (PTC). Originally enacted in 1992, the PTC provides a per-kilowatt-hour tax credit for a ten-year period beginning on the placed in service date for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during a taxable year. While the wind industry is most often associated with the PTC, the following can also take advantage of the tax credit:Qualifying closed-loop or open-loop biomass facilities.Landfill gas facilities.Trash facilities.Qualified hydropower facilities.Marine and hydrokinetic renewable energy facilities.Under current legislation, a project must commence construction before 1 January 2014 to be eligible for the PTC. The PTC has been renewed and expanded numerous times, most recently by the American Recovery and Reinvestment Act of 2009 (ARRA) and the American Taxpayer Relief Act of 2012 (ATRA).The business energy investment tax credit (ITC) is another federal tax incentive encouraging renewable energy investment, which includes investment in:Solar.Qualified fuel cell property or qualified microturbine property.Combined heat and power system property.Qualified small wind-energy property.Equipment that uses the ground or ground water as a thermal energy source.The ITC provides a tax credit of up to 30% of the value of qualified property to owners or long-term lessees. The Energy Improvement and Extension Act of 2008 extended the ITC for solar projects to 31 December 2016.Renewable energy projects can also benefit from accelerated depreciation under the federal tax code, which allows taxpayers to claim an immediate deduction against income of up to 50% of the cost of new qualified property placed in service during a taxable year. The ATRA extended the applicability of 50% bonus depreciation for one year, allowing the expensing of 50% of the cost of qualified property acquired and placed in service by the taxpayer by 1 January 2014.In addition to federal tax incentives, the US DOE implemented a loan guarantee programme under Title XVII of the Energy Policy Act of 2005 (EPAct 2005) to support innovative clean energy technologies that are typically unable to obtain conventional private financing due to high technology risks. In addition, the technologies must avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases. The Section 1703 programme is currently reviewing existing applications. However, there are no open solicitations under this programme. A large number of renewable energy projects have already been financed under the US DOE Section 1705 loan guarantee programme, part of the ARRA. This programme, which is now closed, authorised loan guarantees for US-based projects that commenced construction no later than 30 September 2011 and involved certain renewable energy systems, electric power transmission systems and leading edge biofuels.Many states have implemented renewable portfolio standards (RPS) or renewable electricity standards (RES) that intend to increase the portion of a state's electricity generation coming from renewable energy sources. These programmes generally require a jurisdiction's energy producers to supply a certain minimum share of their electricity from renewable energy sources. A number of RPS policies are implemented through a system of renewable energy credit trading. Currently, 30 states (including the District of Columbia) have mandatory renewable portfolio standards and seven states have renewable portfolio goals. States also encourage utilities to develop renewable energy through state mandated integrated resource planning. This requires a long-range utility plan for meeting the forecasted demand for energy within a defined geographic area through a combination of supply side resources and demand side resources. States and localities often provide additional tax incentives for renewable energy, especially residential photovoltaic systems.

Regulatory barriers

Something like the weather, national energy policy is a topic everyone talks about but no one does anything about. Eight presidents have declared the necessity of reducing oil use, yet no comprehensive national energy policy has ever passed Congress. Instead, states and the federal government have enacted piecemeal legislation for particular issues in different parts of the energy economy. While these policies have accomplished important individual goals, the overall need to reduce oil vulnerability, greenhouse gas emissions and air pollution remain to be addressed in a broad and coordinated way. Never has the federal government considered all the interlocking parts of these issues, the available technology, and the social and economic costs and benefits.

Energy regulator

The federal government regulates the interstate transmission of electricity and gas, as well as wholesale sales of electricity, under the Federal Energy Regulatory Commission (FERC), which was created after Congress passed the DOE Organization Act in 1977. Retail electricity markets are regulated by the states. State regulators ensure that these providers serve their customers at rates that are fair, reasonable and non-discriminatory.

Renewable energy

SolarThe solar irradiation in the South-Western United States is exceptional, equivalent to that of Africa and Australia, which contain the best solar resources in the world. Much of the United States has solar irradiation as good or better than Spain, considered the best in Europe, and much higher than Germany. The variation in irradiation over the United States is about a factor two, quite homogeneous compared to other renewable resources. The size of the United States adds to its resource, making it a prime opportunity for solar development.GeothermalGeothermal energy is present throughout the entire country, with most of the highest-quality geothermal resources generally located in the western United States, Alaska, and Hawaii. However, all states may have geothermal electricity generation potential through the use of enhanced, or engineered, geothermal systems (EGS) technologyWind EnergyWind is the fastest growing renewable source, but contributes only 1% of total energy used in the U.S. The country's onshore wind resources have the potential to generate almost 10,500 GW of electricity, 175 times more than the current installed capacity of 60 GW. Based on the average U.S. electricity fuel mix, a one MW wind turbine can displace 1,800 tons of CO2 emissions per year. With a wind power capacity of 300 GW, 825 million metric tons of CO2 emissions could be avoided annually.BiomassU.S. biomass electricity generation potential is highly dependent on how much biomass is available and how much biomass material is dedicated for this specific use. In 2009 an estimated 54,493 GWh of electricity was generated from biomass, which represented approximately 1.2% of total U.S. net electricity generation. According to DOE, approximately 190 million tons of biomass are consumed each year, with roughly 25% to 35% of current biomass consumption being used for electricity generation. DOE analysis and reports indicate that the potential may exist to produce about 1.3 billion tons of biomass annuallyBiogasCorn-based ethanol is the largest source of biofuel in the United States and the world, but the environmental and food supply problems caused by expanding corn cultivation to produce fuel make it ineffective as a strategy to reduce global warming emissions or create additional oil savings.Advanced biofuels made from non-food sources such as perennial grasses, garbage, and waste materials from agriculture and forestry (known as cellulosic biofuels) offer the greatest potential for oil savings and significant global warming emissions reductions with minimal environmental impacts.The United States has the potential to dramatically expand the production of these better biofuels and take a significant step toward cutting U.S. oil consumption in half over the next 20 years. By 2030, the United States could sustainably produce enough non-food biomass resources to generate as much as 54 billion gallons of ethanol each year—four times as much corn ethanol as the United States produced in 2010.HydroHydropower is currently the largest source of renewable electricity production in the United States. In 2010, approximately 257,000 GWh was generated from hydropower resources, equal to roughly 7% of total U.S. electricity generation. A 2007 report by the Electric Power Research Institute (EPRI) estimated that additional hydropower capacity potential was equal to 62.3 GW.